Apple ordered to disclose patent settlement with HTC

Samsung's lawyers will get to see, but no one else.

Just days after Apple announced it had settled all its patent disputes with HTC, lawyers that had opposed Apple in a much bigger dispute—Apple v. Samsung—said that they wanted to see the settlement. Their argument was that if Apple had licensed to HTC patents it said it originally wouldn't license at all, then that should be considered in post-trial motions to determine whether Apple will be allowed to kick some Samsung phones off the market.

US Magistrate Judge Paul Grewal, who oversees discovery issues in the Apple v. Samsung litigation, ordered a last-minute hearing on the issue the day before Thanksgiving. The same day, he issued his order [PDF]: Apple will indeed have to disclose the amount and the terms of the settlement. Grewal also allowed both sides to conduct additional depositions relating to post-trial briefing over possible additional damages or injunctions.

However, the world will likely never know the exact terms HTC and Apple agreed on. The settlement will be revealed for "attorneys' eyes only," so only outside counsel litigating the dispute will be allowed to see the documents. Analysts' reports that the company could be paying $6 to $8 per phone were dismissed by HTC CEO Peter Chou as "outrageous."

The next step is a key hearing about whether Apple can get an injunction or additional damages. That's scheduled to be held in San Jose, before US District Judge Lucy Koh, in early December.

127 Reader Comments

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

I think what happened was a fair compromise. After all, this is also what Apple is basing its claimed damages (even ignoring "irreproachable harm") upon which Samsung may deserve to be able to counter if it becomes obvious such claims are exaggerated. So long as such data isn't leaked I'm not sure I see what the issue is.

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

I think what happened was a fair compromise. After all, this is also what Apple is basing its claimed damages (even ignoring "irreproachable harm") upon which Samsung may deserve to be able to counter if it becomes obvious such claims are exaggerated. So long as such data isn't leaked I'm not sure I see what the issue is.

Exactly. They can't claim "irreproachable harm" but only by Samsung if HTC was using the same or similar patents and were able to come to a license agreement.

You can't eat your pie and throw it at the other person's face.

Richardprice wrote:

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

This isn't your typical agreement. This agreement allows HTC to use certain Apple patents in exchange of their own patents and perhaps even money. This is also something Apple appears to have been unwilling to do with Samsung.

Honestly I think the agreement should be made public since both are public traded companies and their agreements certainly don't expose any trade secrets that their competitors are able to use against them. When it comes to agreements formed out of lawsuits, I am very for full and public discloser, considering both companies used both public time and public resources ( court resources ) and should have come to a understanding before filing lawsuits.

Didn't Apple offer Samsung a cross licensing deal or to just simply license them for pure hard cash before their trial? Samsung declined at every step according to the details that came out during the case.

One important factor: HTC and Samsung were/are both repped by the law firm of Quinn Emanuel. So it would be difficult to keep that knowledge from the Quinn attorneys on the Samsung side anyway - and keep in mind, these are documents for attorneys' eyes only. Samsung doesn't get the know the info.

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

You would have an argument if Apple and HTC made the agreement outside of court. However, Apple got the court involved, which means a whole different set of rules apply, of which include being able to say that it was a private agreement.

Didn't Apple offer Samsung a cross licensing deal or to just simply license them for pure hard cash before their trial? Samsung declined at every step according to the details that came out during the case.

Samsung also offered Apple their patents, the suit went both ways. Why is it you are ignoring that part?

There are certain elements of Apple's IP they are willing to license, and others they are not. Obviously they didn't license everything for HTC to use, so the findings will probably be that some of the IP they're leveraging against Samsung is covered by the HTC agreement, and some is not.

Are there any lawyers here who can explain how the contents of an agreement could effect the case?

I thought Apple and Samsung negotiated for years before going to court, and never reached an agreement. I don't see how the fact Apple has reached an agreement with HTC has anything to do with it... Apple had already licensed these patents to other companies (including microsoft) previously, so clearly they were always willing to license them, just not at terms Samsung would agree with.

How can this achieve anything apart from expose confidential negotiations?

This judge has only ruled that the agreement between HTC an Apple is discoverable, and only to the attorneys. Samsung has claimed that Apple's damages claim is overreaching, and seeks to provide evidence that Apple has licensed similar patents at below what they are seeking in damages to samsung (as far as I know from what I have read), Judge Koh will have the final say as to whether or not this evidence is admissible.

Would it count to anyone that since this has happened, Samsung's CEO's have now added the 5th Generation iPod Touch and iPad Mini to their patent suit against Apple over a feature that's been on phones since the first 2.4GHz cordless handsets?? Built in speakers worded as follows:"Sound output device meant to amplify the volume of a phone call or device separate from the earpiece"...It beats the ridiculousness of Apple's design patents involving shapes.

Anyway, bantering aside, it's a very good thing it is lawyers' eyes only. Samsung has been extremely aggressive in the patent war against Apple. When you look at their recent filing against Apple by Samsung, the aggression shows. So when you have Lawyers' eyes only, it shows how the CEO of Samsung is acting in bad faith...at the same time, it doesn't allow the public to form an opinion before the case goes to trial again.

Also, as many other readers mentioned, the reason why Samsung and Apple are at it today is because Samsung refused to settle with Apple's simple terms for so long. Samsung refuses to negotiate to licensing terms that it's competitor (HTC) has, and is now acting like a petulant child because they didn't get their way when someone else has.

Here's an excerpt from a November 22nd article from CNet....the part in quotations is particularly interesting:"The Samsung complaint, alleges that Apple's latest products infringe the same patent as previous versions of its devices. Samsung essentially claims that "all Apple products including a built-in speaker and an external audio output port" infringe this particular patent, and thus argues that the newest Apple products should be included in the case."

So yes Samsung isn't entirely an angel. Neither was Apple, but I think it now looks as though that anyone that owns a non-Samsung device of any kind which utilizes "Speaker Phone" or the 3.5mm stereo headphone jack for audio output, owns an infringing device in Samsung's eyes.

As for the judgement to let Samsung's lawyers see it and not the CEOs. It prevents a conflict of interest as HTC and Samsung both employ the same law firm.

This judge has only ruled that the agreement between HTC an Apple is discoverable, and only to the attorneys. Samsung has claimed that Apple's damages claim is overreaching, and seeks to provide evidence that Apple has licensed similar patents at below what they are seeking in damages to samsung (as far as I know from what I have read), Judge Koh will have the final say as to whether or not this evidence is admissible.

Thank you! Someone who finally makes sense.

Joe, if you're reading this, know that I'm extremely disappointed in you. I love some of your perspectives/reporting, but this could have been summed up more simply:

"Apple's full agreement (incl. financials) has to be disclosed, but only to Samsung's lawyers :'("

Man, as much as I dislike Apple's litigious and whiny nature, do I hate Samsung (the mobile arm of it anyway)! That's one sly company. Firstly they bluntly copy Apple's designs (forget iOS vs Android - that's not really black and white) with Samsung's higher management clearly going down the path of steering the company into making products to ape Apple's designs as closely as possible (clear from the lawsuit documents and internal emails). Now they are like leeches trying to ride off of this lawsuit and wielding it to their advantage to even leech of way smaller Android handset making competitors like HTC. What an asshole company! Meanwhile they sell cheap handsets to the markets that can't afford big brands and these phones break (not always physically) in a matter of months. Saw two of my colleagues ditching their DUOS (Star and Ace) line phones within months of owning those.

Man, as much as I dislike Apple's litigious and whiny nature, do I hate Samsung (the mobile arm of it anyway)! That's one sly company. Firstly they bluntly copy Apple's designs (forget iOS vs Android - that's not really black and white) with Samsung's higher management clearly going down the path of steering the company into making products to ape Apple's designs as closely as possible (clear from the lawsuit documents and internal emails). Now they are like leeches trying to ride off of this lawsuit and wielding it to their advantage to even leech of way smaller Android handset making competitors like HTC. What an asshole company! Meanwhile they sell cheap handsets to the markets that can't afford big brands and these phones break (not always physically) in a matter of months. Saw two of my colleagues ditching their DUOS (Star and Ace) line phones within months of owning those.

Though there are only slight differences in design, they are just enough to get around a patent suit.

Yeah, wtf man, it's not like Apple repeatedly tried to make deals with them after asking them to try and differentiate multiple times or anything. They didn't take the deal then, they're sure as hell not going to get one now.

Didn't Apple offer Samsung a cross licensing deal or to just simply license them for pure hard cash before their trial? Samsung declined at every step according to the details that came out during the case.

Yes they did. And if you were offered to get raped or take your chance at hand to hand which would you choose? The deal presented to Samsung was a bend over and get ready to take it offer.

Didn't Apple offer Samsung a cross licensing deal or to just simply license them for pure hard cash before their trial? Samsung declined at every step according to the details that came out during the case.

Yes they did. And if you were offered to get raped or take your chance at hand to hand which would you choose? The deal presented to Samsung was a bend over and get ready to take it offer.

Yeah, Samsung totally couldn't have afforded it and it would of course have been way more expensive to take the licensing deal (after being warned and begged to not keep doing what they were doing) than it was to go nuclear and have that little "How to make TouchWiz more like iOS" handbook go completely public.

HTC (disclaimer: I own an HTC One X) is a small fish. If $6-$8 was "outrageous" then they obviously settled on something that Apple considered fair after taking HTC's financials into consideration (not to mention their cooperation). They both seem pretty happy about it. Samsung has the ego the size of a freight train, and won't stop fighting. They know what they did, they did it anyway, they got caught, they got burned, and now they're just looking for any way to save face. It's pathetic. Whether or not you like Apple (and the groupthink here at Ars is that most don't), they had the case in the bag before it even started. The sooner Samsung makes this go away, the sooner they can return to building phone interfaces, ones that I have no doubt will be incredibly unique and not resembling iOS in the slightest (and although I'm not a huge fan of OEM skins, I look forward to seeing what they come up with).

Yeah, Samsung totally couldn't have afforded it and it would of course have been way more expensive to take the licensing deal (after being warned and begged to not keep doing what they were doing) than it was to go nuclear and have that little "How to make TouchWiz more like iOS" handbook go completely public.

Samsung can afford that $20 per phone, bu they think that they don't have to pay it, so the trial.

Yeah, Samsung totally couldn't have afforded it and it would of course have been way more expensive to take the licensing deal (after being warned and begged to not keep doing what they were doing) than it was to go nuclear and have that little "How to make TouchWiz more like iOS" handbook go completely public.

Samsung can afford that $20 per phone, bu they think that they don't have to pay it, so the trial.

Yeah, Samsung totally couldn't have afforded it and it would of course have been way more expensive to take the licensing deal (after being warned and begged to not keep doing what they were doing) than it was to go nuclear and have that little "How to make TouchWiz more like iOS" handbook go completely public.

Samsung can afford that $20 per phone, bu they think that they don't have to pay it, so the trial.

Yeah, Samsung totally couldn't have afforded it and it would of course have been way more expensive to take the licensing deal (after being warned and begged to not keep doing what they were doing) than it was to go nuclear and have that little "How to make TouchWiz more like iOS" handbook go completely public.

Samsung can afford that $20 per phone, bu they think that they don't have to pay it, so the trial.

I was being sarcastic...

I know that you were sarcastic

...I'm confused then? You basically said exactly what I said, including the part about Samsung not wanting to own up...

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

I think what happened was a fair compromise. After all, this is also what Apple is basing its claimed damages (even ignoring "irreproachable harm") upon which Samsung may deserve to be able to counter if it becomes obvious such claims are exaggerated. So long as such data isn't leaked I'm not sure I see what the issue is.

Exactly. They can't claim "irreproachable harm" but only by Samsung if HTC was using the same or similar patents and were able to come to a license agreement.

You can't eat your pie and throw it at the other person's face.

Richardprice wrote:

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

This isn't your typical agreement. This agreement allows HTC to use certain Apple patents in exchange of their own patents and perhaps even money. This is also something Apple appears to have been unwilling to do with Samsung.

Honestly I think the agreement should be made public since both are public traded companies and their agreements certainly don't expose any trade secrets that their competitors are able to use against them. When it comes to agreements formed out of lawsuits, I am very for full and public discloser, considering both companies used both public time and public resources ( court resources ) and should have come to a understanding before filing lawsuits.

I honestly think your personal details including bank accounts and tax returns should be made public so we understand who we are dealing with here when you post on Ars.

We, the public, simply have a right to know whatever we want, whenever we want.

Whether the agreement between Apple and HTC will become public or not is much less interesting, IMO, than how Samsung's lawyers will use the fact of this agreement to defend Samsung. This was already discussed in this thread, and a_v_s and lyme made some comments that seem to be confirmed by the current news.

I've been seeing a lot of speculation as to what the "price of the settlement is" concerning Apple and HTC. I wish to remind everyone that HTC's CEO stated they aren't paying royalties on a per phone basis and even if they did, they wouldn't be stupid enough to pay 7 to 8 US$ per device.

I also find it sad that when someone points out Samsung's recent activities towards Apple, you get a quite a few dislikes in spite of the truth.

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

I think what happened was a fair compromise. After all, this is also what Apple is basing its claimed damages (even ignoring "irreproachable harm") upon which Samsung may deserve to be able to counter if it becomes obvious such claims are exaggerated. So long as such data isn't leaked I'm not sure I see what the issue is.

Exactly. They can't claim "irreproachable harm" but only by Samsung if HTC was using the same or similar patents and were able to come to a license agreement.

You can't eat your pie and throw it at the other person's face.

Richardprice wrote:

Not sure I like this - competitors getting to see rivals agreements. The ruling should have been that the Judge gets to see the agreement, and he has to make the determination of whether Samsungs claims regarding it are true or not. That way, the agreements contents are kept confidential and the court gets to side with Apple or Samsung based on its contents.

This isn't your typical agreement. This agreement allows HTC to use certain Apple patents in exchange of their own patents and perhaps even money. This is also something Apple appears to have been unwilling to do with Samsung.

Honestly I think the agreement should be made public since both are public traded companies and their agreements certainly don't expose any trade secrets that their competitors are able to use against them. When it comes to agreements formed out of lawsuits, I am very for full and public discloser, considering both companies used both public time and public resources ( court resources ) and should have come to a understanding before filing lawsuits.

I honestly think your personal details including bank accounts and tax returns should be made public so we understand who we are dealing with here when you post on Ars.

We, the public, simply have a right to know whatever we want, whenever we want.

To an extent, yes we have the right to know. But there are 2 specific reasons why we won't see it.

1) If Samsung's CEO saw the details of the Apple/ HTC compromise, it would get their case against Apple thrown out. It would be considered a conflict of interest considering that Sansung employs the same law firm as HTC.

2) If this was released to the public, it would potentially sckew the conclusions that a newer Jury would make if this case ended back up in jury trail.

A couple of things that we do know are that Apple's legal team are normally pretty switched on and that Samsung's dropped the ball a few times before and during the previous trial.

As an Ars poster pointed out on another thread, Apple would have certainly considered the possibility that Samsung would want to see what was in their agreement with HTC and have written it accordingly, e.g. $30 to Apple for their patents and $30 to HTC for theirs, leaving both companies with highly valued IP but not having to pay each other...

Yeah, wtf man, it's not like Apple repeatedly tried to make deals with them after asking them to try and differentiate multiple times or anything. They didn't take the deal then, they're sure as hell not going to get one now.

Apple may be an asshole, but Samsung is easily the douchebag.

They aren't douchebags....they are more like the mob. One has to take a look at their checkered legal history to understand what I'm saying...

Just an example...Samsung owns a major newspaper. When the F700 was panned by British critics, it reported that the negative reviews brought out were because the British dignitaries that came to visit were spending more time at bars and drinking during the presentation.

Apple may be aggressive at times, but you don't see them bribing the US government *winces preemptively knowing full well there are going to be Samsung device fans waiting in the shadows*

You can love your iOS or Android devices, but when you actually see what Samsung has gotten into in the past compared to other phone makers, it makes Apple's patent suits look like tinker toys.

Didn't Apple offer Samsung a cross licensing deal or to just simply license them for pure hard cash before their trial? Samsung declined at every step according to the details that came out during the case.

Samsung also offered Apple their patents, the suit went both ways. Why is it you are ignoring that part?

Samsung's CEO's personal and recent litigation against Apple is over Audio output and volume controls...yes the patent for the 3.5mm stereo headphone jack for which Samsung doesn't even own (let alone license) is on the list of "infringements"

At least Apple had some sense to sue Samsung over patents Apple already owned.

Didn't Apple offer Samsung a cross licensing deal or to just simply license them for pure hard cash before their trial? Samsung declined at every step according to the details that came out during the case.

I find it interesting. I'm almost willing to bet that HTC was offered the same deal Samsung was.

Upon the unveiling of the F700, which was released before the iPhone was released in the market, but after the iPhone was shown to the public, the first question the press asked was "How does it stack up to the iPhone?".

Um, disclosure does not mean admissibility. There is a much broader standard here.

Disclosure is the first step to admissibility--if looking at the HTC-Apple agreement could have had no bearing on the Samsung-Apple case then there would have been no reason for Samsung's attorneys to ask to see the agreement. As far as the Attorney's Eyes Only thing goes, that's just a standard in the case that cuts equally for both the companies involved on any number of issues as opposed to some special condition applying only to Samsung's look at the HTC-Apple agreement. Further, I don't see any objection here from Samsung's attorneys and reading the .pdf indicates the judge gave them exactly what they asked for.

I especially enjoyed the part about Apple's attorneys getting called out for fibbing about a "week's delay" on the part of the Samsung attorneys, with the judge making specific note that he found no due diligence problems there at all as he slapped Apple down on the point. He had to remind the Apple attorneys about their own emails as received from Samsung's lawyers. But I guess that's what litigating attorneys often do--make up stories and spin yarns for objections when they have nothing substantial to raise, hoping the judge is an idiot...

A couple of things that we do know are that Apple's legal team are normally pretty switched on and that Samsung's dropped the ball a few times before and during the previous trial.

As an Ars poster pointed out on another thread, Apple would have certainly considered the possibility that Samsung would want to see what was in their agreement with HTC and have written it accordingly, e.g. $30 to Apple for their patents and $30 to HTC for theirs, leaving both companies with highly valued IP but not having to pay each other...

Indeed. I highly doubt Apple's lawyers left a smoking gun in the HTC licensing deal. But then again HTC did have some pretty strong leverage on Apple. I don't think Apple settled the claim for altruistic reasons. Could be they were backed into a corner following ITC ruling on HTC's LTE patents.